UltraTech Cement will buy 23% stake in India Cements for ₹1,885 crore, shares rise

Cement manufacturing major UltraTech Cement announced the purchase of 23 percent stake in Chennai-based India Cements Limited for about Rs 1,885 crore. According to the information given by UltraTech Cement to the stock market, the company will buy 7.06 crore shares of India Cements at a price of Rs 267 per share. According to company information, its board of directors in its meeting held on Thursday approved making financial investment to buy 7.06 crore shares of India Cements Limited.

UltraTech Cement is continuously expanding

According to the news, on the basis of Rs 267 per share, the transaction price of this acquisition comes to Rs 1,885 crore. According to UltraTech, this non-controlling financial investment represents about 23 per cent of the share capital of India Cements. Cement manufacturer UltraTech Cement has been continuously expanding, adding 18.7 MTPA of capacity in the last 12 months. The indicative time period for completion of the deal between the two companies is one month.

Rise in shares of UltraTech

Shares of India’s largest cement company UltraTech rose by 6 percent and reached a new peak of Rs 11,811. At around 10.15 am, the company’s shares were at Rs 11,614, up 4 per cent. Shares of India Cements were at Rs 288, up 9 per cent. However, later there was a decline in the stock’s rise. At 1:04 pm on BSE, the company’s shares were trading at Rs 11460.95 with a rise of 2.79%.

Competition among big companies

According to Reuters news, Choice Broking research analyst Ashutosh Murarka said that it is becoming clear that big companies in South India are vying for each other. He said the stake deal has escalated the nationwide rivalry between UltraTech and its smaller rival Adani Group and will certainly hurt regional competitors. Till March, UltraTech had 11% market share in the south Indian cement market, when it acquired Kesoram Industries’ new tab cement business for $645 million last year.